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Revenue from local health centres triples to Sh18bn on new policy
Revenue generated by the counties from health centres tripled from Sh6 billion in the 2022/23 financial year to Sh18 billion in the financial year to June 2024.
The amount of cash collected from local health facilities across the country tripled to Sh18 billion in the financial year to June 2024, buoyed by a policy shift that allowed county governments to collect money from the institutions beginning July 2023.
A report by the Parliamentary Budget Office (PBO) reveals that the revenue generated by the counties from the health centres tripled from Sh6 billion in the 2022/23 financial year, boosting the devolved units’ own-source revenue (OSR).
This follows the rollout of the Facilities Improvement Fund (FIF), which was set up after the enactment of the Facilities Improvement Financing Act, 2023. The FIF allows county governments to collect money from primary health centres and reinvest it in them.
“The operationalisation of the FIF has been very successful, with the counties collecting Sh18 billion in OSR from the health sector in FY 2023/24 compared to Sh6 billion in the financial year 2022/23,” notes the PBO in a new report.
“This is an indication of the potential counties have when provided with appropriate incentives.”
During the same financial year, OSR collected by counties rose to hit a record Sh58.95 billion, largely driven by the increment in the health sector collections, which now account for 30 percent of the devolved units’ locally raised revenue.
This was a 55 percent increment from the Sh37.81 billion collected by counties in the year to June 2023, but still 27 percent below the year’s target of Sh80.94 billion.
The FIF was part of President William Ruto’s reforms in the healthcare sector meant to boost universal health coverage (UHC). It established a fund financed through user fees collected from the local facilities and other sources, which are used to develop these primary facilities in villages.
The Act that established the fund introduced more secure and accountable ways of collecting money from health facilities and prevented county treasuries from taking back unspent funds from the kitty.
This was envisioned to promote the development of local health facilities, bolstering the efforts towards universal health coverage in the country. However, to achieve this, the parliamentary expert group says FIF could use some more funding.
It suggests that the kitty should get at least 40 percent of the funds allocated to the Sports Arts and Social Development Fund (SASDF), which was set up to promote sports and social development, including UHC.
The Parliamentary Budget Office also advised the state to enforce further the requirement for the newly formed Social Health Authority (SHA) to pay claims within 90 days, especially to primary facilities to facilitate their proper functioning.
